San Dimas-based American States Water Co. on Thursday reported a drop in second quarter earnings as its petition for a rate hike for its major water utility hit a regulatory snag.

American States Water reported earnings of $9 million (47 cents per share) for the second quarter, down from $11.5 million (64 cents) in the second quarter of 2009.

The company fell substantially short of the analyst consensus estimate of 57 cents per share. The company’s share price dropped 3 percent to close Thursday at $34.76 per share.

The company reported that it was hit with an increase of $2.5 million in operating expenses at its main Golden State Water Co. utility. The company tried to recover the expenses through a rate hike, but approval for the increase has been stuck in the California Public Utilities Commission.

The company said it now expects CPUC approval of the rate hike in October, with the rate hike being retroactive to Jan. 1.